Nvidia Acquires Groq for $20 Billion in AI Accelerator Chip Deal
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Dec 24 2025
0mins
Should l Buy NVDA?
Source: CNBC
- Record Acquisition: Nvidia's acquisition of high-performance AI accelerator chip designer Groq for $20 billion in cash marks the company's largest deal to date, underscoring its aggressive expansion strategy in the AI sector.
- Swift Deal Closure: Groq, which raised $750 million at a $6.9 billion valuation just three months ago, was not actively seeking a sale, yet Nvidia's interest quickly led to the transaction, reflecting the strong market demand for AI accelerator chips.
- Robust Cash Reserves: As of the end of October, Nvidia reported $60.6 billion in cash and short-term investments, a significant increase from $13.3 billion at the beginning of 2023, providing ample financial resources for large-scale acquisitions and reinforcing its market leadership.
- Significant Industry Impact: With Groq targeting $500 million in revenue this year amid surging demand for AI accelerator chips, Nvidia's acquisition is set to enhance its competitive edge in AI technology and boost its capabilities in inference tasks for large language models.
Trade with 70% Backtested Accuracy
Stop guessing "Should I Buy NVDA?" and start using high-conviction signals backed by rigorous historical data.
Sign up today to access powerful investing tools and make smarter, data-driven decisions.
Analyst Views on NVDA
Wall Street analysts forecast NVDA stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for NVDA is 264.97 USD with a low forecast of 200.00 USD and a high forecast of 352.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
41 Analyst Rating
39 Buy
1 Hold
1 Sell
Strong Buy
Current: 190.040
Low
200.00
Averages
264.97
High
352.00
Current: 190.040
Low
200.00
Averages
264.97
High
352.00
About NVDA
NVIDIA Corporation is a full-stack computing infrastructure company. The Company is engaged in accelerated computing to help solve the challenging computational problems. The Company’s segments include Compute & Networking and Graphics. The Compute & Networking segment includes its Data Center accelerated computing platforms and artificial intelligence (AI) solutions and software; networking; automotive platforms and autonomous and electric vehicle solutions; Jetson for robotics and other embedded platforms, and DGX Cloud computing services. The Graphics segment includes GeForce GPUs for gaming and PCs, the GeForce NOW game streaming service and related infrastructure, and solutions for gaming platforms; Quadro/NVIDIA RTX GPUs for enterprise workstation graphics; virtual GPU software for cloud-based visual and virtual computing; automotive platforms for infotainment systems, and Omniverse Enterprise software for building and operating industrial AI and digital twin applications.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Coinbase's Q4 Earnings Call Preview
- Market Focus: The upcoming earnings call is expected to highlight discussions on 'stablecoins' with a 96% probability, and 'custodial' topics at 94%, indicating strong investor interest in stablecoin market dynamics that could influence Coinbase's strategic direction.
- Regulatory Challenges: Coinbase has withdrawn its support for the cryptocurrency market structure bill due to opposition against a clause prohibiting exchanges from paying interest on users' stablecoin balances, which may impact its compliance strategy and future business development.
- Financial Expectations: Analysts forecast Coinbase's Q4 revenue to be $1.85 billion, down 18.5% from $2.27 billion last year, with an expected earnings per share of $1.07, reflecting a significant 68% year-over-year decline that could negatively affect investor confidence.
- Stock Performance: Coinbase shares closed 1.29% higher at $167.25 on Monday, but have plummeted 26% year-to-date, indicating a weak price trend in the short, medium, and long term, which may influence investor holding decisions.
See More
Nvidia Benefits from AI Investment Surge
- Massive Capital Expenditure: Alphabet and Meta are planning to invest $305 billion in 2026 to expand AI bandwidth, significantly higher than last year's spending, indicating strong market demand for AI infrastructure that directly boosts Nvidia's market share and revenue growth.
- Market Dominance: Nvidia holds approximately 90% market share in the data center chip market, leveraging its Hopper, Blackwell, and upcoming Ruben architectures along with CUDA software to enhance its competitive edge in AI application development, ensuring sustained revenue growth.
- Strong Financial Performance: For the third quarter of fiscal 2026, Nvidia reported a 62% increase in revenue and a 65% rise in net income year-over-year, showcasing its robust performance in the AI sector, attracting investor interest and boosting market confidence.
- Potential Risk Factors: Despite Nvidia's impressive results, concerns about an AI bubble and the trend of customers seeking self-sufficiency could pressure future sales, necessitating careful evaluation of the sustainability of long-term returns by investors.
See More
Analysis of Nvidia's Stock Price Decline Reasons
- Market Value Erosion: Nvidia's stock has declined by 6% in 2026, resulting in a loss of approximately $400 billion in market value, reflecting investor concerns about the company's future growth, which could impact its financing capabilities and market confidence.
- Increased Competition: AMD is gradually closing the gap in the GPU market, with tech giants beginning to incorporate AMD chips into their existing Nvidia infrastructure, potentially leading to a slowdown in Nvidia's market share and growth rate.
- Rise of Custom Chips: Hyperscalers like Meta and Alphabet are collaborating with Broadcom to design application-specific integrated circuits (ASICs), which could undermine Nvidia's competitive edge in its core data center business, affecting its long-term profitability.
- Uncertainties in China: Ongoing trade tensions and national security issues have stalled Nvidia's growth in the strategically important Chinese market; despite some recent progress, the future remains highly uncertain, potentially impacting its global strategic positioning.
See More
Reasons the Expanding Stock Rotation Isn't Propelling the S&P 500 Beyond Major Tech Companies
- Market Dependency: The S&P 500 is heavily reliant on megacap tech companies for its performance.
- Need for Support: Significant assistance is required for the equity markets to transition away from this dependency.
- Shift in Focus: There is a nascent shift towards investing in "real economy" stocks.
- Early Stages: The rotation into these stocks is still in its early phases, indicating potential for growth.
See More
Nvidia Shareholders Anticipate Positive News Ahead of Earnings
- TSMC Sales Surge: Taiwan Semiconductor reported a nearly 37% year-over-year increase in January sales, surpassing historical averages and driving its stock to all-time highs, indicating strong market demand that could positively impact Nvidia's chip sales.
- Export Recovery in Taiwan: Taiwan's Ministry of Finance revealed an 8% month-over-month increase in January exports of automatic data processing equipment, excluding laptops, breaking the typical trend of declines in January, suggesting a rebound in market demand beneficial for Nvidia's performance.
- Data Center Growth Outlook: While UBS projects only an 18% quarterly growth for Nvidia's crucial data center division, the overall positive market signals suggest that Nvidia may achieve strong results in its upcoming earnings report, potentially boosting its stock price.
- Attractive Valuation: Nvidia's stock has risen nearly 42% over the past year, yet it currently trades at less than 25 times forward earnings, significantly below its five-year historical average of around 35 times, indicating an appealing opportunity for long-term investors to consider buying in.
See More
US Stocks Drift Lower Amid Retail Sales Slowdown
- Retail Sales Weakness: December retail sales remained virtually unchanged at $735 billion, signaling a significant slowdown from November's 0.6% growth, which could adversely affect overall economic recovery during the holiday season.
- Market Reaction: The weak retail data has led to increased bets on interest rate cuts by the Federal Reserve, with over 75% of traders now expecting lower rates by June, reflecting growing concerns about the economic outlook.
- Corporate Earnings Focus: Companies like Coca-Cola (KO) and CVS Health (CVS) released their latest quarterly earnings, with Coca-Cola reporting a 5% organic revenue growth but offering a 2026 outlook below analyst expectations, resulting in a decline in its stock price.
- Oil Price Trends: Brent crude prices have risen 11% year-to-date, while West Texas Intermediate crude is up 10.4%, indicating that despite geopolitical risks, there remains a bullish sentiment in the oil market.
See More
Coinbase's Q4 Earnings Call Preview
- Market Focus: The upcoming earnings call is expected to highlight discussions on 'stablecoins' with a 96% probability, and 'custodial' topics at 94%, indicating strong investor interest in stablecoin market dynamics that could influence Coinbase's strategic direction.
- Regulatory Challenges: Coinbase has withdrawn its support for the cryptocurrency market structure bill due to opposition against a clause prohibiting exchanges from paying interest on users' stablecoin balances, which may impact its compliance strategy and future business development.
- Financial Expectations: Analysts forecast Coinbase's Q4 revenue to be $1.85 billion, down 18.5% from $2.27 billion last year, with an expected earnings per share of $1.07, reflecting a significant 68% year-over-year decline that could negatively affect investor confidence.
- Stock Performance: Coinbase shares closed 1.29% higher at $167.25 on Monday, but have plummeted 26% year-to-date, indicating a weak price trend in the short, medium, and long term, which may influence investor holding decisions.
See More
Nvidia Benefits from AI Investment Surge
- Massive Capital Expenditure: Alphabet and Meta are planning to invest $305 billion in 2026 to expand AI bandwidth, significantly higher than last year's spending, indicating strong market demand for AI infrastructure that directly boosts Nvidia's market share and revenue growth.
- Market Dominance: Nvidia holds approximately 90% market share in the data center chip market, leveraging its Hopper, Blackwell, and upcoming Ruben architectures along with CUDA software to enhance its competitive edge in AI application development, ensuring sustained revenue growth.
- Strong Financial Performance: For the third quarter of fiscal 2026, Nvidia reported a 62% increase in revenue and a 65% rise in net income year-over-year, showcasing its robust performance in the AI sector, attracting investor interest and boosting market confidence.
- Potential Risk Factors: Despite Nvidia's impressive results, concerns about an AI bubble and the trend of customers seeking self-sufficiency could pressure future sales, necessitating careful evaluation of the sustainability of long-term returns by investors.
See More
Analysis of Nvidia's Stock Price Decline Reasons
- Market Value Erosion: Nvidia's stock has declined by 6% in 2026, resulting in a loss of approximately $400 billion in market value, reflecting investor concerns about the company's future growth, which could impact its financing capabilities and market confidence.
- Increased Competition: AMD is gradually closing the gap in the GPU market, with tech giants beginning to incorporate AMD chips into their existing Nvidia infrastructure, potentially leading to a slowdown in Nvidia's market share and growth rate.
- Rise of Custom Chips: Hyperscalers like Meta and Alphabet are collaborating with Broadcom to design application-specific integrated circuits (ASICs), which could undermine Nvidia's competitive edge in its core data center business, affecting its long-term profitability.
- Uncertainties in China: Ongoing trade tensions and national security issues have stalled Nvidia's growth in the strategically important Chinese market; despite some recent progress, the future remains highly uncertain, potentially impacting its global strategic positioning.
See More
Reasons the Expanding Stock Rotation Isn't Propelling the S&P 500 Beyond Major Tech Companies
- Market Dependency: The S&P 500 is heavily reliant on megacap tech companies for its performance.
- Need for Support: Significant assistance is required for the equity markets to transition away from this dependency.
- Shift in Focus: There is a nascent shift towards investing in "real economy" stocks.
- Early Stages: The rotation into these stocks is still in its early phases, indicating potential for growth.
See More
Nvidia Shareholders Anticipate Positive News Ahead of Earnings
- TSMC Sales Surge: Taiwan Semiconductor reported a nearly 37% year-over-year increase in January sales, surpassing historical averages and driving its stock to all-time highs, indicating strong market demand that could positively impact Nvidia's chip sales.
- Export Recovery in Taiwan: Taiwan's Ministry of Finance revealed an 8% month-over-month increase in January exports of automatic data processing equipment, excluding laptops, breaking the typical trend of declines in January, suggesting a rebound in market demand beneficial for Nvidia's performance.
- Data Center Growth Outlook: While UBS projects only an 18% quarterly growth for Nvidia's crucial data center division, the overall positive market signals suggest that Nvidia may achieve strong results in its upcoming earnings report, potentially boosting its stock price.
- Attractive Valuation: Nvidia's stock has risen nearly 42% over the past year, yet it currently trades at less than 25 times forward earnings, significantly below its five-year historical average of around 35 times, indicating an appealing opportunity for long-term investors to consider buying in.
See More
US Stocks Drift Lower Amid Retail Sales Slowdown
- Retail Sales Weakness: December retail sales remained virtually unchanged at $735 billion, signaling a significant slowdown from November's 0.6% growth, which could adversely affect overall economic recovery during the holiday season.
- Market Reaction: The weak retail data has led to increased bets on interest rate cuts by the Federal Reserve, with over 75% of traders now expecting lower rates by June, reflecting growing concerns about the economic outlook.
- Corporate Earnings Focus: Companies like Coca-Cola (KO) and CVS Health (CVS) released their latest quarterly earnings, with Coca-Cola reporting a 5% organic revenue growth but offering a 2026 outlook below analyst expectations, resulting in a decline in its stock price.
- Oil Price Trends: Brent crude prices have risen 11% year-to-date, while West Texas Intermediate crude is up 10.4%, indicating that despite geopolitical risks, there remains a bullish sentiment in the oil market.
See More
